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Cannabis trading

The marijuana industry presents a wealth of trading opportunities, its growth driven by legalisation that continues to spread across the US and Canada – and spurred on by ever-increasing support from the public. Discover how to trade cannabis stocks and ETFs with the world’s No.1 spread betting and CFD provider.1

Why is cannabis trading suddenly so popular?

As more states and countries legalise cannabis – fuelled by greater acceptance from the public – there’s reason to believe that the marijuana sector’s prospects for continued growth look good.

In fact, research suggests that the US legal marijuana industry could be worth as much as $75 billion by 2030.2 With forecasts like these, it’s no wonder that savvy traders have been flocking to the market, eager to capitalise on the latest trending marijuana stocks.

Benefits of trading cannabis

Why trade on cannabis, as opposed to buying marijuana stocks outright? There are a few unique advantages that spread betting and CFDs offer over traditional investment.

Go long or short

Take advantage of market movement, whether cannabis prices are rising or falling.

Free up your capital

Deposit just a fraction of your trade’s full value to open, with your profit or loss based on that full value.

Get tax benefits

Profits made from spread betting are free from capital gains tax, while losses on CFDs can be offset against profits for tax purposes.3

Key cannabis markets

Cannabis margins

Cannabis spreads

Spread betting and CFD trading are both a form of leveraged trading, meaning you can win, or lose, a significant amount more than you pay up front. Though not actually a cost to you, the margin you pay makes a big difference to the affordability of your trade, and differs between providers.

Your key payment for trading cannabis is the spread, essentially our commission for executing your trade. We work to keep our spreads among the lowest in the business.

Get swift verification

Fund your account and trade

What moves cannabis markets?

Changes in the law

Cannabis is currently legal, in some capacity, in 43 US states and Canada – which accounts for most of the industry’s business. Further legalisation will be positive for share prices, where a return to illegality would deal a blow.

Supply and demand

With the industry in relative infancy, cannabis suppliers are expanding rapidly to meet investor expectations and public demand. However, that can’t last forever, and a supply glut – where supply outstrips demand – could see share prices falling.

Company news

As with any stock, the speculators that drive price movement will look to company news – changes in executives, earnings reports – to decide what’s positive or negative for marijuana businesses.

FAQs

What is cannabis trading?

When you use a financial product – for example, a spread bet or a CFD – to speculate on the movement of a cannabis-related asset, with the aim of profiting from that movement, you are participating in cannabis trading.

That asset could be the stock of a company that produces cannabis or a cannabis ETF made up of a basket of related cannabis stocks.

Cannabis trading differs from investment, which means the outright purchase and sale of cannabis stocks or ETFs. When trading on cannabis, you are speculating on price movement and never own any assets. You can also use trading products like spread bets and CFDs to profit whether markets are rising or falling, whereas investment only allows profit if an asset increases in value.

What is a cannabis index?

A cannabis index, or marijuana index, is a gauge of performance for a section of the marijuana industry. The price of a marijuana index will be derived from the prices of a selection of related marijuana assets. This could be the 20 top-performing marijuana stocks, for example.

IG’s cannabis index market captures the gross total return performance of the 20 largest publicly listed US and Canadian companies with direct revenue exposure to the cannabis industry. The index is calculated and managed by BITA GmbH.

You can trade on the price of a marijuana index by using financial derivative products like spread betting and CFDs, and use them to profit whether the price is rising or falling.

You might be interested in…

Learn how to trade on the performance of an industry in four steps, from choosing your market to placing your first deal.

Find out how trading contracts for difference (CFDs) can help you take advantage of price movements in the financial markets.

Discover the marijuana high rollers that are getting traders talking.

1 Based on revenue excluding FX (published financial statements, February 2018).2Cowen & Co, 2018.3 Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.4 Negative balance protection applies to trading-related debt only, and is not available to professional traders.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results.

CFD, share dealing and stocks and shares ISA accounts provided by IG Markets Ltd, spread betting provided by IG Index Ltd. IG is a trading name of IG Markets Ltd (a company registered in England and Wales under number 04008957) and IG Index Ltd (a company registered in England and Wales under number 01190902). Registered address at Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. Both IG Markets Ltd (Register number 195355) and IG Index Ltd (Register number 114059) are authorised and regulated by the Financial Conduct Authority.

The information on this site is not directed at residents of the United States, Belgium or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.